Tags: MarketWatch | Gold | commodities | decade

MarketWatch Columnist Gold: Commodities Face 'Bruising Decade'

By    |   Wednesday, 12 November 2014 06:21 PM

The super-cycle of soaring commodity prices that prevailed from 1999 to 2008 has started to move in the opposite direction, and the result won't be pretty, says MarketWatch columnist Howard Gold

"Gold, oil and other commodities are well off their peaks, so far off and for so long that they can only be described as in a super-cycle in reverse, or a secular bear market," he writes.

The precious metal has dropped 40 percent from its September 2011 record high of $1,923 an ounce. And U.S. crude oil prices have fallen 28 percent just since June.

So, "investors who piled into commodities are in for a bruising decade ahead unless they take profits or cut their losses," Gold says.

Overcapacity and sluggish demand now plague the commodities sector.

Shawn Driscoll, manager of the natural resource-focused T. Rowe Price New Era Fund, told Gold that commodity cycles last for 13 to 15 years, because that's how long it takes for supply-demand fundamentals to move out of whack.

As for gold, CNBC contributor Ron Insana agrees that the precious metal is in for more pain. "If I were a betting man, and sometimes I am, the long-term chart of gold suggests that the old high in gold of $800 an ounce could be its new low," he writes on CNBC.com.

December gold futures settled at $1,159.10 on the Comex Wednesday.

"In the absence of a full-scale geopolitical crisis, economic collapse, or other 'black swan' event, there is no good reason to hold gold," Insana says.

The metal's bearish fundamentals include low inflation, a strong dollar and a buoyant stock market, he says.

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The super-cycle of soaring commodity prices that prevailed from 1999 to 2008 has started to move in the opposite direction, and the result won't be pretty, says MarketWatch columnist Howard Gold.
MarketWatch, Gold, commodities, decade
273
2014-21-12
Wednesday, 12 November 2014 06:21 PM
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